Government Unveils Industrial Strategy with Major Focus on Clean Energy

The UK Government has published its updated Modern Industrial Strategy, outlining a long-term plan to support economic growth, unlock investment, and strengthen industrial capabilities across the country. Energy plays a central role in this strategy, with a focus on accelerating the transition to cleaner, more secure sources of power and supporting the industries that rely on them.

A significant component of the plan is the target to mobilise £30 billion in annual investment in clean energy sectors by 2035. This includes areas such as offshore wind, nuclear, carbon capture, hydrogen, heat pumps and energy networks — industries seen as central to the UK’s energy future and net zero goals.

Electricity Costs and Grid Reform

High electricity prices have long been a concern for UK industry, particularly for energy-intensive sectors. The strategy includes measures to address this, including the British Industry Supercharger and a new British Industrial Competitiveness Scheme. Together, these aim to reduce electricity costs by around £35–40/MWh for eligible sectors from 2027.

Alongside cost measures, the government is introducing reforms to the grid connection process to speed up access for new projects. Waiting times, which can exceed 10 years in some cases, are expected to be significantly reduced through a new Connections Action Plan and a streamlined queue management process.

Public Funding and Clean Energy Infrastructure

The Industrial Strategy confirms a package of public funding for clean energy technologies and supporting infrastructure. This includes:

• £14.2 billion for the Sizewell C nuclear project

• £2.5 billion for small modular reactors

• £1 billion for clean energy supply chains

• Nearly £10 billion for carbon capture, usage and storage (CCUS) through 2029

The plan also highlights continued support for heat pump deployment and UK electrolyser manufacturing for hydrogen, positioning the UK to participate in emerging global supply chains.

Support for Energy-Intensive Industries

Energy-intensive industries such as chemicals, steel, and ceramics are identified as areas requiring targeted support to maintain competitiveness. The strategy outlines upcoming reviews of the Energy-Intensive Industries Compensation Scheme and plans to integrate these sectors into broader decarbonisation frameworks, particularly ahead of the UK’s planned Carbon Border Adjustment Mechanism, due to come into effect in 2027.

The government is also encouraging the use of Corporate Power Purchase Agreements (CPPAs) as a way for businesses to secure long-term electricity contracts directly with generators, supporting renewable growth and price stability.

Regional Growth and Workforce Development

To support clean energy deployment and industrial renewal at a regional level, the strategy includes plans for new investment zones, additional support for industrial clusters and a national energy workforce strategy. These measures are intended to build local skills pipelines, support emerging technologies and ensure wider regional participation in the transition to low-carbon energy.

Summary

The Industrial Strategy presents a framework for how the UK intends to strengthen its industrial base, attract investment and meet its climate and energy security goals. For organisations in or reliant on the energy sector, the measures outlined may impact areas such as procurement, infrastructure planning, and regulatory engagement.

Further details and sector-specific plans are expected to follow through 2024 and 2025 as consultations progress and funding programmes are rolled out.